LendingClub (LC) 26 Jul 232023 Q2 Earnings call transcript

Hello, everyone. Thank you for attending today's LendingClub's Second Quarter Earnings Conference Call. My name is Sierra, and I will be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers around the end. [Operator Instructions]

to of conference Finance like Nalivayko, to now President Vice with would pass over the Artem I LendingClub. Please proceed.

Thank Welcome conference you, to LendingClub's second afternoon. and quarter call. good earnings

recent Drew LaBenne, to our talk Joining CFO. Scott me and results today and CEO, Sanborn, events about are

section find Relations presentation the the website. can our earnings our You on release accompanying Investor of

questions the via be answering also call, we analysts, will consideration in On for of addition that the from email. submitted to the questions were some

forward-looking statements expectations strategy, include to, performance. are business, based involve Our and volume, current will remarks advantages statements macroeconomic limited that on our outlook, future platform loan are future and risks and and today and our competitive not and products financial forecasts, conditions and include, and uncertainties. These but services,

from may those by results these actual differ forward-looking contemplated statements. Our materially

our that described are Commission, made recent the differ subsequent as cause in our these XX-K our today's SEC, as Factors results statements most make to and are Exchange these and with the forward-looking call Securities as filed update this well as obligation Form release of materially could as that on result information or no Form with press filings new events. upcoming a assumptions undertake on today, based XX-Q. of statements we to future and including we Any

supplemental per useful share pre-provision provide net and Our remarks believe today tangible non-GAAP also include non-GAAP measures measures common including book revenue. relating to our value performance, these We information.

measures a directly GAAP presentation comparable can earnings accompanying the find on most the You reconciliation measures to of information use release. and more our in non-GAAP our

the turn to over like Scott. to I'd now, And call

everyone. Welcome, Artem. Thanks, right. All

reflecting model. leverage continuing lower of marketplace balance originations our strategic disciplined solid in billion our results delivered in We $X quarter's advantages to guidance, quarter, with thanks line the The was in planned execution by range and to less the and end is retention. was revenue, guidance was by continued marketing the of non-interest made was expense exceeding high and efficiencies. revenue revenue $XXX pre-provision which sheet which our and Total operating million, expenses, million net possible $XX bank

straight profitability. ninth our delivered we quarter result, a of As

Now, bank business let income demonstrating net on some current the our with its of interest dynamic. resilience The provide is context stable me operating quarter-over-quarter. portion

are we for in marketplace, temporary non-interest resulting income. in the our is which to believe on headwinds what be, pressure However, our we facing, outlook

First, though asset with remain our And their moving earnings on as as near-term to quarter thus we signaled partners, origination and our and evident clear they likely and is capital pullback capacity discussions regional appeal ever, last now an as is, have to bank's bank address for sidelines are productive now, to will volume. the high-yield of banks restricted. invest impact to concerns. while in their And currently have the liquidity bank far, our we short-duration continue reported is more than

selling portfolios And market second, saturated to a options. banks position, strengthen are with deep at their already that's discounts. significant loan That's adding capital to investment supply

yields this cost our that volumes. sustainable. side, the leaning believe to On we're market in raising meantime, higher bank don't And the pressure is And We pricing. this into buy; stepping marketplace dynamic managers positive profitable sales new asset offset however, capital loan on support to create is structures are their capital. and higher they're seeking of they putting are to to advantages in

buyer, exchange attractive cost This at buyer and CECL provides for upfront marketplace predetermined and without remote retains I on an the residual earns a financing yield private the two-tier last pool our the of effectively with in to LendingClub a certificate note friction, essentially in program securitization mentioned loan a sells structured credit is low provisioning. price. low which a and risk quarter, certificate loans senior LendingClub which

have initial reception a a to solid for We've and we deliver bank, positioned our forward had the is marketplace uniquely investors. of are as this pipeline interest. good So program we something to

Another increasing in for while especially future loans a seasoned certainty we for investors, advantage earning recently million broaden We LendingClub credit interest around bank investors ability this our the environment. program. at $XXX income season is to is buyer, interest our which important the of sold are and hold gain, performance loans to of from and for the receiving

originations I generally should the continuing now rate with to also note by non-bank majority compete of in near coupons. lenders. deliver we the in Fed We've required increases returns investors for environment, priced are raise the that this where prime we loan rate to

Our adverse disciplined compete our points. and We're portfolio, pricing and banks, on way basis to up on continuing XXX we test where generally prime we're up pricing. roughly avoid selection, here our deliberate being with is to now

then booked in and for Now and let's on resulted fully our credit and adapt outperformance are in investment loans, signals credit and the performance our have data read our our $XX we modestly for continue pleased credit strategies and vintages The to team to before advantaged underwriting our taken continue turn losses we'll competition. billion the expectations investors consistent we strong we're our below actions since to have has and infrastructure, enabled before evolved our delinquencies inflation And above manifested prolonged strong loan for the to models. ourselves. maintain and with in held from over delivering we're flexible portfolio, us while generating credit, returns seasoned where the

options fall reduce federal the this a are currently this credit many for population. we payments be muted, a on-ramp to payment this believe any exposure risk higher set new will financial taken hiatus. to is the after impacts our month resume we're that's student are period ahead, the to and what Looking members believe that portfolio ourselves preparing given proactive XX we've actions reality, we the government carefully And loan segments to and multiyear of available, providing, reduced while

timing stay taking to debtors hardship to LendingClub loan size to members includes coming and payment steps track, loan available options so, need and additional we of needed, they outreach sure make are that reduced to the plans the that them educational of Even our government, their of the bridge a aware student they're on from if gap. payments, ensure custom understand if on and

a high we touch our result rates demonstrated in loyalty. during can lower As approach to delinquency members helping and proactive increased COVID,

remains what long-term more our ambition help them earn member keep and earn them they of that products and on base they services with surrounding growing and Our save. more what

a installment have that and mobile six savings integrated to experience; over and plan easily into seamlessly prioritize existing fully and rate. experience, starting of debts, at spending view launch optimize to an a their to and that combines We allows to line debt continued any credit innovate, new we integrated loan management a monitoring allowing pre-approved to the credit and months, test payments mobile and into sweep members their next a app and single tools this into fixed reduce members lending, cost; a balances

platform able Importantly, new to new additional eventually will this last be on feature support products. will revolving that a be built

their So, the continue remainder marketplace; options as over persist environment liquidity a is we and/or raising banks we XXXX. the interest to resulting them; do I repositioned believe growth lower accelerate of enabling this we following: current and said confluence investment But Fed temporary the their won't have term. to earlier, begins rates the the oversupply ideally, at is and stabilizes ability least environment period see subsided. stops prepared our challenge events the capital to remain macro will long meaningful to levels, the that And of for drive th`e when to of from and, return

historic normal conditions. As primary of record a to profitability, opportunity the market a resiliency Until we're partner to well differentiated return create balances asset bolster capture beneficiary marketplace of And our expect class, to long-term card that more that and in high are believe a at benefits we this choice we to high more near-term record our credit experience. to rates. refinance be of positioned leveraging maintain model business member bank happens, the we

LendingClub always, their continued want for As to commitment to future. the and our hard work building thank towards bigger I employees

I'll with you, it to And turn that, Drew. over

hello, everyone. Scott, and Thanks,

the you originations the quarter. the of me start results. details through with I'll Let walk in second

and were million billion to previous compared in the $X in billion, were $X quarter sold $XX billion prior quarter. $X.X the XXXX. in second compared of quarter billion $X.X the marketplace originations, $X.X billion loans Of up Originations the to

levels in early through approximately As Loan down helped We XX% our retention retention back came the marketplace our facilitating with earnings. from quarter, $XXX normalized to Scott million, range we available marketplace we've sales in first issued million which the as mentioned, within structured in XX% $X the certificates. in success quarter expected line drive sales. had growth billion $XXX to in

was and quarter a in in PPNR. Now previous the pre-provision a prior quarter was of let's The million well million areas. operations to in net expense to was our sale a sequential compared driven to management $X guidance streamlining $X the as by our and other expenses, as improvement $XXX million to that and quarter portfolio from million PPNR July, on proactive revenue outperformance million completed primarily revenue, second in $XX the marketing move of or gain in compared XXXX. for pending due early $XX

for we are These $XXX observed loan the portfolio in with discount loans investor prices. whole third we approximates of will are value in this at a increasing demand As have approximately originating on that personal loans that loans seeing Scott mentioned, million been books quarter. and fair for seasoned, purpose come the our sale

quarter prior $XXX $XXX was million revenue in and quarter compared the the to Total $XXX of million quarter prior in the for same million year. the

the Let's revenue. dig components our into two of

at our earnings revenue can X Page starting details You of find presentation.

prior income sequentially First, year. the flat XX% was over million, $XXX net and a interest up

was the Our change cash year. net compared yield increased unsecured due which X.X% on consumer in offset interest in was loans. deposits, X.X% of primarily partially interest as by and was average prior higher to as cost well bearing prior higher margin quarter balances X.X% to a the The

was in to in same and quarter prior first quarter well million prior the $XX $XXX quarter. year. change the a The to revenue the non-recurring million million was in Marketplace lower of due million loan primarily in benefit as revenue quarter compared marketplace $XX the as in $X pricing, the

same expense favorably discuss million XX prior $XXX the $XXX quarter to turn variable and of slowing to and sequential million million Comp hiring quarter quarter please operations. in where expenses. earnings due presentation marketing in company. as of also $XXX primarily across of last improved the pace lower Now, was benefits in compared the Page our of the The expenses our year. I'll in a result Non-interest to and reduction

of reflects million communicated savings cost expense beginning annual track which at the had exceed. target we run Our we fully rate to $XX the on year in the are

credit compared sequential was decrease turn Provision a primarily on the of to $XX back in the was $XX reserves larger let's for accretion second fewer quarter provision. in XXXX. result increase prior retained partially for the both lower million day XXXX an vintage. million loans The losses and to loans the by the one CECL the offset of Now in due quarter on and to book of XXXX quarter, more and quarter

our vintage, As which the see loss modestly borrowers. pressure range for will presentation, of on of Page and rates XX XXXX on XXXX of earnings increased the the we our you expected lifetime inflationary on net estimates reflects impacts have

early our the While initial to showing from that observations of are underwriting it's tightened stable vintage, judge XXXX performance the implemented last now several the still over ultimate the quarters. performance, is we've benefiting it

XX, to to to lower a of margin higher on to interest net and have on loans due return funding we On updated marginal XX% XX% costs personal Page quality our a equity higher mix. reflect range

is marginal risk-adjusted would be means the risk marginal leverage. returns on that generated current to note it that helpful approximately to even using important are thought also we on weighting more XX% our the and our XX%, of which on a It structured share sheet balance is addition, ROE which a securities certificates, returns these these basis. In attractive

let's Now, $X.X of million, the taxes. XX% quarter income. in pre-tax Taxes to were or move

will in in mentioned we rate some quarter. variability I As the effective to quarter, from have the quarter last

that Our effective our to tax be we to tax and rate year-to-date, in XX% long-term continue rate. is with expect line

billion to was due on at quarter deposits. the decrease cash of to assets note primarily here. the $X.X end balances planned sheet. the the things billion of to me quarter. result brokered The the Total $X.X for previous compared lower balance as were a touch maturity Few let Now, of

$XXX to certificate in our quarter. growth reflects increase of $XXX grew million The portfolio structured securities in Our the program. million primarily

senior sheet. the we balance our earlier, retained security hold tranche mentioned the it and of on I As

Dodd Frank. In addition hold as loan to tranche, we also a security whole by X% senior required the

You will to grow see the the scales. securities portfolio as continuing program

that held sale loans Loans spoke fair the July, was into quarter of million at held completed at for which as $XXX the investment for earlier. were value for moved we in in held approximately I for the million transaction sale $XXX to end early

increased loans. of for these As types I seasoned demand seeing mentioned, are we

We are transactions in completing more on future. program and the growing planning this

strong XX.X% capital consolidated Our with levels XX.X% and X leverage remained CETX. Tier

$X.X hand billion cash available our Our healthy liquidity insured. of on of are with remains and deposits XX%

of to approximately Federal we $X substantial continue Bank, Reserve both Federal June the a unused maintain Additionally, borrowing at and with amounts Home total at Bank billion capacity XX. of Loan

let's the to for move Now our third guidance quarter.

demand to This managers expect is volume asset to outlook. Scott be lower with going As we marketplace prices. primarily bank informing mentioned, at our constricted

expenses, $XX basis For on the originations volume-based by of is to and remain which our related our to purchase And to objective expect for PPNR $XX retention. billion. one-time to third held billion quarter with range GAAP to $X.X investment benefit we million, on million quarter, for the includes $X.X from reducing between execute incentives expect and $XX investor from channel. discipline a we up to loan continuing million profitable the recouping bank It

Our retention, held investment assumes balance includes guidance and for for XX% to the originations. which XX% quarter for sheet sale both held

Putting maintain program, of combination accounting. structured a and the under loans, for held of held CECL whole for upfront it together, reflect of quarter growing for provisioning be balance certificates, value will to structured sale planning sheet loans and extended third all for the in our Held sale through will held loans certificates investment fair size seasoning. are investment the we

while to also will We attractive facilitate via our new marketplace revenue through income these balance enable diversify to continue interest to us and helping structures programs, recurring sheet sales. which earn

We and believe marketplace on expected than given banks the the recovery loan longer continued secondary initially a in take sales. that priced pressure will aggressively

expect resilient will continue versus have we conditions, the at profitability giving But growth. on While of of remain pressures and we're we time, the at not fourth a for to remainder the market quarter least these guidance regardless this business, year. focused we

ahead, As massive we look further there's opportunity in us. a front of

accelerate as a the will innovate to positioned discipline, to leverage We as execute quickly continue the In conditions improve. and advantages are marketplace. offerings, with our well to strategic meantime, we on bank our evolve

that, With open up it for we'll Q&A.

Partners. Our Ryan Seaport question Instructions] with Bill from comes proceed. first Please [Operator Research

questions. Good taking for afternoon. my Thanks

just it's either at your to volume. you again now to that what it, guidance put up then on going you a tightening origination on mean, on year of year-over-year, now within And on be First quarter. on a just comp bit originating question basis, relative investor looks volume softer like you're of can is giving at what just balance you're like looking looking see credit year-over-year little because this right ago, I it you're the kind right demand a kind or sheet? of it range are last seems the the is based you and --

impact Scott. Yes, which purchases. latter, This really with of basically is Bill. Hey, it's the the is bank

acceptable. really it's we're the prepared that As in find economics we for the we demand investor remarks, available mentioned -- originating

credit a not -- it's we're story. So,

to of prices we're demand origination credit, are that course, volumes to manage to at are, We the but take. continuing really targeted willing as always

a And on NIM. just the question Okay. follow-up We...

And I'm Bill. sorry,

Just...

Yes.

obvious, now there. is it's on it the ever the touched TAM $X credit in assets interest but, moved the rates trillion mean, I stating up yet They're have Just remarks, they've and the in been again. enormous. right currently at highest over XX.X%, card we

demand. not -- borrower we about is So, are this

the NIM on follow-up to just And Okay. outlook.

structured You certificates that the sheet. it be about down buildup guided on would balance talking last quarter liquidity the of

compression Sort or forward, little further to you bottom potentially from do here? we bit looking close are of a see getting a margin here,

Drew. It's Bill. Hey,

all, that the about the buildup and of half -- exactly decrease QX NIM cash. on correct QX from in in of QX, was First decrease from

then things competitive NIM, I if remain in future I nature to for Fed NIM think, to two have, the on, go. way. does downward anything of continue a would evolves of say the bit on but or stable, we'll if modest close we're the the quarter pressure more on market the two, think forward, kind that little those and to else -- it does I Going we're bottom further depend if deposit think I any and But in

Okay. Thanks.

from question Reggie next with Our comes JPMorgan. proceed. Please Smith

follow-up question. Good guess evening, thanks a the question Bill's for to and taking earlier. I

sounds most for like, the kind demand feels rather loan looking or back like issuers are the it of high. it loans So, as volume personal And is of pulling the just across you landscape, still said, though kind now.

Because So in dynamic, origination could would or my origination why basis, am are Like, or there? you question charge sensitivity? either more what's able I squeeze with that that aren't the able to pricing probably missing a with APR is, you seem maybe out. you it What fee? smaller

Reggie. Hey, Yeah.

depends try the talking I'll market really to touch of So, you're It segment about. what on this. on

in, it, pass prime whose non-bank curve, also with that the finance where of that is but So, of funds on, near done already. the price and to companies, we cost portion is the up let's indeed, portfolio and specialty fintech, moving competition we've forward call able are includes the lenders, locked the

that on prime pretty amount but we're hold we're the Fed already So, our the the portfolio we stuff don't -- the pricing has moved. that near is close to actually issuing that,

points. our prices is lags, But cost in hold, they're we've what right? our environment right? market that but ability given we've deposit, in of so, can for we going up move the right? testing price the highest the corresponding about most variety We're own are up, so, what their And quality, the competing their we're in And also realizing always Banks bank moving because on to as banks, somewhat you And a we're to we think that's prime pricing, betas funding of origination given space, upmarket, the credit where of right sell, outlook, both moved moved investor now. in. interest with

of and is getting, population we're sure the make we the what So, we understand that door monitoring are stable. to that through population

And are as so, we moving can. we

we're As at with that's stabilize different we points see just we and move. stabilize, banks population take rates because a price But there, higher at competing rate.

Got it.

one of or I I that explain ticked quarter. of revenues down Okay. in kind a could marketplace that question -- If marketplace first non-recurring decline think I more of as volume? guys in. million sneak Does in the you it most your indicate percentage suggest the Did benefit yield in understand. a marketplace was $X you said that

say, the his head on I'd year, he's Well, I'll million, about specific loan seeing last $X of the course the but let over thinking what Drew this we're marketplace the answer that, as on around you're getting while pricing. is broadly pressure

driver that And this yield so, of In up pressure reflected putting on cost pressure so That of expected That on the funding. where of their go. especially asset managers, their is their funding curve, the price. marketplace has environment, cost which funding. is the on gone Fed the the in puts forward requirements, of is to cost gets

the right mentioned that in we I'm a you're also we're stuff shopping seeing is we billion are, cost need What we of -- one funding, the which for kind we sure glut now. our in temporary, $X.X yield think to there's addition just portfolio paper is higher mean, of higher are competitors same offset seeing seeing I loans. of what we now that right relative market of is but former of got

regional got that coming You've institutions balance And this to trying any sheet. got year. clean market. the They're are earlier up in failed off portfolios banks of then the you've the number from of their

all loan loans, RV auto So market. in they're the solar portfolios loans,

rising capital this and with all news, in good I'd the to say of got from news, on pressure now. have price. choose temporarily bad least further yes, And, supply, space, to amount a our at not asset But right is but lot forming is need. So, there's managers

buyers expecting higher cost in pressure reflected And than capital and a QX, the the our fact partially we're was are outlook in pay of that in lower to QX. able are continue actually constricted. with increase, managers, asset because buyers bank So that the for the bank to price

is will. you buyers, of volume some if swapped lower at of being So with that least kind priced

But that know, if I the a... was Drew, don't general got question. you

in getting the I'm are pricing top we just QX, marketplace what in because reason was that, of million Yes, for prepayments of as asking. slower so was of revenue, is QX a in loan that servicing in primary seeing answer. that. the was upward lower part And the the kidding. Reggie terms forgot Reggie, That No. sales. Yes, on the I causing a to we of decline portfolio reminder, asset. on But the that valuation are $X

And expect other So that's guidance. QX, we included into in from impact will our indicated the get quarter. the increase which in as pricing is this as marketplace revenue that we comments, pressure we

quarter GAAP earnings neutral Got of that, I with kind guess expect -- -- pre-provision for it. I quarter, even And least you your to presentation, still alluded in estimate the from profit you your to it's it guess, an perspective? next at but remain -- GAAP

We're being GAAP on basis a QX. profitable Yes. for targeting

Perfect. Thank you.

next Please comes Our from question Jefferies. proceed. Alexander with Villalobos

for Thanks, my question. taking guys,

Just wanted side. net Saw X.X%. to get a at little offs more sense charge on the credit

kind you prospects -- the at that. give that should tick little stick us are you. then bit around Thank a and up ALLL how for of of like also sense we range? the Like, a it might think get about Or next quarters? thinking just Just X.X%. few guys to was And

Yes.

reminding off how CECL works. by So, just again start let just everyone me

day lifetime are us, we for So with reserving losses for discounted the one. CECL,

what rate up terms taken that balance of the that already charge up, on reserve off ACL So go we've -- to we're so the that the anticipated we've or point. as in in provision seeing sheets

the vintage, as the go product loan charge an life that we as off up. personal rate is, way over down, the then principles going see and -- amortizing closed the So each it product will works of

older of as that originations in the aging, are of the down 'XX subsequent offs it's average as, we're the increasing quarters. charge age part we're 'XX So portfolio 'XX right average on of now -- increasing, just age top but part in slowing the that, obviously as one, that what phenomenon of the get is the to even is or vintages portfolio seeing vintage, of with and going

rate that but our into keep So, ACL. factor going would to off our provisioning expect in we charge up, that

through you expenses. really OpEx that. the totally everyone's Again, Perfect. did going I on understand. And then I guys well normalization, saw side, controlling

if Just to a to same few on as get expense also sense well. get kind sense next the should we level of OpEx for quarters? side think the of Just a about the Thanks. wanted

main expect you that next depend quarter much is could marketing, It there on a sell, a Yes, sheet to we bit other versus the little to bit does expenses, benefit, expense because expense we of benefit And a of move the most put be operating benefit just sure. should there. Probably how the then, tied the run of at there that's balance variable originations. took but of rate might little from be a realized now QX. actions beginning we've but

guys, Thanks, the congrats Awesome. Okay. quarter. on and

Alex. Thanks,

Our with next Giuliano Point. proceed. Bologna from Compass question Please comes

if them the back can. it's the will as that near lever could you're kind those And, structured happen. getting term, so you'd sense probably a that going of a like certificates In curious, time notes, how how dilutive if and of curious But sheet obviously, somewhat you can have be benefit. have a I'd yield I because balance into over fast you I'm up, pivot structured on to the lower those. much of to

Yes.

have about few put think me we there, we So, things a a program. target the out want I but that yet don't let to say

are several -- buyers lot other the in interest other we a have have remarks mentioned a are with we we I think that have I this we very quarter close. our $XXX that first and several million we did -- of buyer, prepared

will So I have the is think quarter, our expectation. volume in multiple increase and buyers next we'll that

balance over we that some use risk we obviously our -- NIM we about So, more going the obviously, lower security. capital, given sheet this us weight for to I and can maneuver it [around gives time, the creates dilution. risk for latitude (ph) the] this targets as the conscious nature But the think forward. will of of think some product We're as

of Is coming beta, will And That points little just about a last basis through should in where, weeks. hikes for costs, like pricing makes portfolio? XX-or-so rolling the funding that in with up looks came a and the XQ, sense. couple obviously, the CDs rate good high-yield more [indiscernible] at it up savings or into least, then thinking savings go trajectory some

Listen, it's hard predict. little a to

-- current be slowed in that of outlook, the have deposit our decreased be in terms the our we where doesn't aggressive being don't as at on though. flat roughly or for slightly pricing least given the to we in balance on sheet and year, actually growth uncompetitive QX, mean we tables. need It we're We of planning can either, that's rest sit

Hopefully, into need And So, that But of a a show rate moving keep translate competitive and down less pricing price. we will somewhat can translated what to have to think bit stay in aggressive deposit amount we somewhat being on continue. growth. small has the hopefully easing slower -- I that recently. a we're little -- we're can tables into it already

last -- growing too before on this the helpful. there're you're sheet you more gains the those, very here? structure make about of need after that of sell on curious, be thinking into what recognizing [indiscernible]. efficient. able or sense a quarter And be to to balance the but [indiscernible] little or -- Do start would the far There's more to you the the a might way you [indiscernible] have maybe from have That's it future, any see happen being do some kind I'd jumping down risk balance to going sheet be discussion about bit ahead this, some

Yes, sorry.

portion holding sheet the now? balance selling So we (ph) are [ALLL] you right on the mean

That's right.

true. That's Yes.

think them selling So right the if impact I the there think that's for definitely listen, -- now. price we would impact option were future. I an actually The rate does environment out

actively or in if a aren't on is to balance Fed vintages the But and to how if make the But I it happens. future. that we'll flexibility volume So it new engaging think may manage in We'll we space evaluate we sense that yet. when sell that more then do those up happens it to free put and when near done, the have on, lot sheet. on of

for you back my taking the thank Well, great. queue. will and jump Sounds I questions, in

you. Thank

Our next proceed. Please question KBW. with from Tim Switzer comes

Hey. Mike for Good taking on for Thanks I'm my Perito. evening. question.

hi, Tim. Yes,

yes. in which kind shifting X.X% historically. quantify lower -- you've the sale of on, mentioned could from one how like of is to you give reported about first the gain margin And looks quick the -- pressure from about My the guys that the pricing bank much idea from I one Can it marketplace that X.X%, or us you us real to go? went an have low help kind of on the have asset managers. purchasers

it's quarter, Yes. we think our points. that maybe, to quote we'll this approximately we're drop. that probably prices, XXX sale I probably think to expecting And you gain basis drop on -- take I than mean, next rather steepest

So, directly I X.X% downward. from that the translate think would

that's to factored be we as on those that's sale QX. a pivot to size our in the of getting -- that loans going into hit decent to going a be also asset terms So But for managers. pretty gain that's we're on guidance

partners, say, Yes. tenor internal in banks engaged and mode new buyers, I'd partners we credit long-term both the unions. to now. who prepared though, still mentioned those program, the also looking bank Based of actively quite on are join our they're the but all add, I'd as we management remarks, for conversations, with are both in

we not that's certainly so their -- some to issues own return they've about talked why but of platform, a addressed. And we anticipate got the until

QX, NII Can flat year? give trend us QX. in maybe sheet you're kind of but on Is little average it things, an the that flat, of how on over of sense. makes holding then side NII an the bit I you of Okay. down guess a the basis to compared lower rest implies Yes, balance in QX? should the And that if then idea

Yes, I think a of couple things. it's

going decline impact cash the So, average QX largely be we the in about from one, in before. is to assets that spoke

and the will loans -- some So million then in $XXX as we impact well. sold have

on it So, see QX, back a, and in dip we'll with in income, interest the a does net Fed now we terms other at think, the way right factors. modest the of least dependent QX what have recovery I

Thank for That's helpful. all me. That's Okay. you.

your are questions. for you Instructions] waiting. Thank [Operator questions further no There

and answers to call questions to the submitted by turn over like So, for I email. Nalivayko would the Artem

All right. Thanks, Sierra.

a and that Scott by here you So, our for we email Drew, shareholders. was via submitted few do questions have

members? here So something card new products better like into is, any LendingClub looked the first your launching question credit has for with

So I very, touched very this on briefly calls. on the

revolving going on be in in a to are, the next new platform. quarter, We launching QX,

case first-go, The and That'll combination be in that we the their go this or rest. balances That'll and after help they've good first pay revolve be management demonstrated platform. credit the customers didn't dashboard payment, enabling we're card platform and use on the existing whom to card of up be see credit line for balance revolving them an for the use can debt off monitoring going in case working is that. to with installment of first all we who build the credit back of

know We have they purchase a finance have of we economics also capture taking revolving currently cards our cards. business distribute our that them they XX% more credit know We has to we that We term. by kind use could partner for over what that, for. what product have. customers that that of long

interested exploring when we So that's in to. our that be we think certainly would customers would and open allow conditions something be that

the agreements Great. flow And announcing you consider publicly or Thank and you. agreements origination forward to is, drive funding growth? further these any signing second would question

I'll can the with sign thing making purchases there'll sure. -- buyer buyers. incentives of bank that agreements potential buyers mean, time all of Yes, is when And I agreements, possible oftentimes, there's continues those with -- you type us. a to one our a the from sign note to all It's couple way our rebates some that financial those see take them through as if attached rebate. first of we in going I'd fact And back loan stopped one. where the one it's is guidance, the to purchasing. bank our buyers come QX agreement, be of their we

to a within structure also that So, them. we deals some that way have flow, have but like financial longer-term incentives

expensive difficult those first more think of structuring those And with never would and much environment. be be up this -- a capital, all, fulfilled difficult. of terms that environment, difficult you as have well, they In committed to they're XXX% agreements I to going something certainty long-term in a set very in are

unattractive right now be to lock So, we're of to economics extended in might time just and that the an our is sure not agreement us shareholders.

All right. Great. Thanks, Drew.

our at have call. Thanks feel us please joining that, earnings with us. we if free will for conference up ir@lendingclub.com. you second And any quarter So email wrap questions, to

conference will call. today's conclude That Thank for you your participation. all

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